Bank Blockchain Budgets Increased by 67% in 2017

The use of blockchain technology in the financial industry has seemed to be increasing recently, and proof can be found in a recent report by the US-based market intelligence company Greenwich Associates.

Greenwich interviewed over 200 participants in the study over blockchain budgets, team sizes, use case exploration, key challenges and other issues to get its results.

According to the report, companies in the financial services industry spent about $1.7 billion USD on blockchain in 2017, which is an increase of 67%.

The number of companies that created a dedicated blockchain initiative doubled in 2017, while the report also has stated that “the typical top-tier bank” has approximately 18 employees working full-time on blockchain technology.

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Nearly 14% of the banks and other companies that were interviewed had said that they were successful in releasing a blockchain solution.

The reduction of costs that comes with the use of blockchain technology is called “the biggest driver of blockchain investment,” although the study does mention that it can potentially be used for “creating revenue opportunities” and “shortening settlement time.”

It’s estimated that nearly one in ten companies have a budget for blockchain that is over $10 million. Greenwich has said in its report that although companies are focusing more on this technology, the “product development has been unable to keep up with the hype.”

Richard Johnson, Vice President of Greenwich Associates Market Structure and Technology, has said that “more than half the executives [they] interviewed told [Greenwich] that implementing DLT [distrubuted ledger technology] was harder than they expected.”

This suggests that even though more and more companies in the financial services industry are attempting to implement blockchain technology, it is still difficult to get the process started.

Johnson ends his statement optimistically by saying:

“Nevertheless, more than three-quarters of projects currently under development are expected to be live within two years.”

As more financial firms decide to make use of blockchain, do you think it can be integrated by all companies in the future?

Ripple has added 11 new universities to its University Blockchain Research Initiative (UBRI). With a strong emphasis on developing the upcoming generation of developers, the UBRI is designed to develop blockchain-focused academia and research.